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The Monday Morning Playbook: Week of June 24, 2024

Nvidia reverses but laggards play catch-up

Good morning,

The market’s focus remains firmly on semiconductors and technology. And with good reason. As Nvidia goes, so goes the S&P 500.

After the company briefly became the most valuable in the world early last week, it reversed hard and ended the week nearly 10% down from its highs.

The base case for Nvidia is the same as it was in early March. A confirmed reversal on the daily chart means last week’s high ($140.76) can be viewed as near-term resistance and a potential short-term top.

Below that level, the risk/reward looks poor to me but there’s nothing about the chart that suggests the long-term trend is a risk. Major tops have to start somewhere but they aren’t formed in a day or even a week.

But an underappreciated story was the bullish response from lagging areas of the market, amidst the sell-off in technology.

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Brown Technical Insights
Brown Technical Insights
Scott Brown, CMT